Another drop in home lending next month could sound alarm bells for the residential property market, analysts say.
Finance commitments for owner-occupied housing fell almost eight per cent in January and others say some of the heat has already been taken out of the booming residential property market.
Economists had expected the number of owner-occupier housing finance commitments to have risen by two per cent in January.
ICAP economist Adam Carr said he was not “too freaked out” about the result January result, just yet.
“But if February shows a fall of a decent magnitude then I think there’s a problem,” Mr Carr told AAP.
“I think we’ll need to just stop and take a really good look at what’s going on there because clearly the strength we’re seeing in the housing market is not going to be maintained if lending figures continually drop.”
While owner-occupier home loans suffered the biggest decline, total housing finance by value fell by 3.3 per cent in January, seasonally adjusted, to $21.159 billion, the Australian Bureau of Statistics (ABS) said earlier this month.
Many economists attributed the fall in demand to first home buyers dropping out of the market following the winding back of the expanded first home owners grant from January.